Credit card debt relief government program

The Act covers personal, family, and household debts. This includes money owed on personal credit card accounts, auto loans, medical bills, and mortgages. Within five days after a debt collector first contacts you, the collector must send you a written notice that tells you the name of the creditor, how much you owe, and what action to take if you believe you do not owe the money. If you owe the money or part of it, contact the creditor to arrange for payment. If you believe you do not owe the money, contact the creditor in writing and send a copy to the collection agency informing them with a letter not to contact you.

Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. If you're unable to pay your creditors, filing for bankruptcy can help you get a fresh start.

Bankruptcy involves liquidating or selling off your assets to pay your debts. Or it can mean creating a payment plan. Before considering bankruptcy, you should first explore other debt management options. Bankruptcy information stays on a credit report for 10 years. It can also make it difficult to get credit, buy a home, get life insurance, or sometimes get a job.

There are two personal types of bankruptcy you can file with the Bankruptcy Court: Chapter 7 and Chapter 11 Bankruptcy. Filing for Chapter 7 or Chapter 13 Bankruptcy can plague you with a set of challenges , such as lawsuits, monetary judgments, or garnished wages which you may want to avoid, not to mention the long term impact on your credit score which it may incur.

If you want to avoid bankruptcy, debt settlement is a viable and recommended alternative by the Federal Trade Commission.

Though debtors can hire a firm to help with creating a debt settlement plan , the FTC warns against for-profit firms as they are often out to scam debtors.

Debtors can create their own self-managed debt settlement plan or look into free credit counseling agencies. The U. Department of Housing and Urban Development certifies credit counseling agencies, which are close to qualifying as a credit card debt relief government program and can create a debt management plan for the debtor.

Missing a payment on your credit card or paying it late can result in fees or added interest, but it can also have a negative impact on your credit score. Be prepared to provide documentation about your current situation. While your credit card company may offer up one or more options, have a list of questions prepared in advance. Note: that the recently passed Coronavirus Aid, Relief, and Economic Security CARES Act places special requirements on companies that report your payment information to credit reporting agencies if they provide payment relief due to the coronavirus pandemic.

During the relief period, you want to make sure to look at your statement each month for any errors or inaccuracies, and if you see anything, make sure to refer back to the agreement so you can dispute it. There may be cases, though, where you get financial assistance from your credit card companies, but your interest continues to accrue.

If this is the case, making the minimum payment—and making it on time—could help ease the burden later on. Your credit card company has 30 days to confirm receipt of your notice as well as two complete billing cycles — but no more than 90 days — to investigate and respond to you. The credit card company can show good faith efforts to obtain the necessary information and make a determination as quickly as possible, and complies with all other requirements pending resolution of the error.

You can typically check your credit reports for free, once a year. However, the three major credit reporting agencies — Experian, TransUnion and Equifax — are currently allowing consumers to check their reports weekly for free.

However, if you were already behind on your payments at the time you receive relief, the lender is not required to report that you are current.